Capital Credit Union Launch Small Business Loans & SBCI Scheme Participation - Capital Credit Union
Capital Credit Union

Capital Credit Union Launch Small Business Loans & SBCI Scheme Participation

Capital Credit Union Launch Small Business Loans & SBCI Scheme Participation

Capital Credit Union are proud to support the recovery of local businesses, including the €2 billion COVID Credit Guarantee Scheme.

“Bizfin.ie” a business lending website is being launched to help local sole-traders & businesses get access to credit

Plumbers, electricians and other sole traders impacted by COVID expected to utilise low-cost loans of €10,000 to €300,000

Capital Credit Union set to meet face-to-face with all business members to deliver rapid lending decisions

On the 25th of January 2021, Capital Credit Union launched their Small Business Lending Initiative along with 12 other credit unions nationwide and are also partnering with Government in the low-cost COVID-19 Credit Guarantee Scheme.

The Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar T.D. made the announcement of the participation of two the largest Credit Union associations in Ireland, the Irish League of Credit Unions (ILCU) and the Credit Union Development Association (CUDA) in the Government’s COVID-19 Credit Guarantee Scheme.

The Tánaiste said:

“Irish SMEs will now be able to borrow from a further twelve Credit Unions under the €2bn Covid Guarantee Scheme. These new providers, from the Irish League of Credit Unions and the Credit Union Development Association, have a wide geographical range, from Blanchardstown to Castlecomer, from Westport to Navan. Credit Unions are at the very centre of communities across the country. They have an excellent reputation in their local areas and understand the needs of their customers. Their inclusion will help further diversify the options available to small business under this Scheme.”

Based in South Dublin, Capital Credit Union has 9 branches and over 50,000 members. Capital Credit Union believes it will succeed in working with micro, small & medium sized businesses, impacted by COVID-19, to review their cash-flow and working capital requirements to enable these businesses to survive, protect jobs, create future employment, and thrive in 2021. Capital Credit Union plans to build on its strong connections in the local community to engage with local businesses and offer them the necessary support.

The COVID-19 Credit Guarantee Scheme offers reduced interest rates on loans of up to 5 and a half years to Irish businesses responding to the impacts of COVID-19, including those in the farming and fishing sectors, with no personal guarantees required for loans under €250,000.

Gerry McConville, CEO of Capital Credit Union said,

“I am delighted to announce the launch of Capital Credit Union’s Small Business Lending Initiative and our participation in the COVID-19 Credit Guarantee Scheme. With over 50,000 members and 50 years serving the local community, Capital Credit Union is ideally placed to support local businesses as part of this scheme. Our process is clear, fast and efficient to meet the needs of local businesses and ensure they are looked after properly.”

Minister of State at the Department of Finance, Séan Fleming said,

“I welcome today’s announcement that a further twelve credit unions, supported by the Irish League of Credit Unions (ILCU) and the Credit Union Development Association (CUDA), will be participating in the COVID-19 Credit Guarantee Scheme, bringing the total number of credit unions in the scheme to nineteen. With their unrivalled local knowledge, credit unions are ideally placed to support the recovery and providing loans to local businesses is a key element of the recovery. Further development of SME lending in a controlled manner could also assist credit unions in growing and diversifying their loan book.”

Minister for Agriculture, Food and the Marine Charlie McConalogue TD said,

“I am delighted with the addition of 12 credit unions to the COVID-19 Credit Guarantee Scheme. As well as providing a greater choice of lenders for farmers, fishers and food businesses, it will benefit rural communities, which continue to be well-served by the credit union movement. At this time of economic disruption, access to finance is critical to ensuring the ongoing viability of businesses, including those in the agri-food sector and I am pleased that my Department is supporting this initiative.”

The scheme is operated by the SBCI and delivered through the participating finance providers, allowing affected businesses to access additional financing through traditional lenders. 19 Credit Unions with multiple outlets are now participating finance providers in the COVID Credit Guarantee Scheme.

About COVID-19 Credit Guarantee Scheme

The scheme made available by the Department of Business, Enterprise, Trade & Employment is to support the economic recovery and interested parties can find further information on the COVID-19 Credit Guarantee Scheme here.  Businesses will be required to make two declarations, i] that their turnover or projected turnover has been reduced by 15% as a result of COVID-19 and ii] that it has a reasonable prospect of returning to viability post Covid-19.  The scheme can provide liquidity finance. It is situated between the shorter term COVID-19 Working Capital scheme and the long-term Future Growth Loan Scheme being offered by the Government.

Businesses need not previously have been clients of a participating provider to apply for lending from those providers. Loans of up to €1 million are available for up to 5.5 years.  No personal guarantees or collateral is required for loans under €250,000. All loans have reduced interest rates demonstrated in the agreement documents with the participating enterprise.

The scheme will be available until the end of June 2021, or until it is fully subscribed.

The COVID-19 Credit Guarantee Scheme operates under the State Aid Temporary Framework introduced in response to the pandemic.

Participating Credit Unions have signed legal agreements whereby the maximum individual loan is set by the Credit Guarantee Amendment Act 2020 and in turn the European Commission State Aid Temporary Framework (Section 25D). This results in the maximum loan been calculated as:

double the annual wage bill of the participating enterprise for 2019, or for the last year available

25% of the participating enterprises’ total turnover in 2019; or

in limited cases and with appropriate justification, the amount of the finance agreement may be increased to cover the liquidity needs from the moment of granting for the coming 18 months for SMEs.